The Draft Amendments of Article (77) of the Capital Market Institutions Regulations

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Purpose
Agencies
Effect
Subjects

Capital Market Institutions Regulations

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Capital Market Institutions Regulations

Current Provisions

Provisions after Proposed Amendments

Clarification

Article 77: Returns

a) No returns are payable to a client in respect of client money held in a client account.

b) Without prejudice to the provisions of this Part, a capital market institution may deposit the client's money in an account that provides returns with a local or overseas bank, and obtain such returns or part of them, provided that the client's prior written approval has been obtained, in addition to satisfying the conditions stipulated in the Client Money Rules.

Article 77: Returns
Without prejudice to the provisions of this Part, a capital market institution may:

1. Deposit the client's money in an account that provides returns with a local or overseas bank, and obtain such returns or part of them, provided that the client's prior written approval has been obtained, in addition to satisfying the conditions stipulated in the Client Money Rules.

2. Provide a service to the client, in which the money held in the client's investment account is invested and provide a return on it, if the following requirement are satisfied:

a) comply with the requirements of understanding risks and suitability in accordance with the provisions of these Regulations.
b) Obtaining the customer's prior written approval to receiving the service and terms of providing it, including the period in which the client can - based on his request - redeem his invested money.
c) Investment shall be in short-term and low-risk products.

The proposed amendments aim to provide capital market institutions' clients with the opportunity to utilize their deposited money by investing that money in investment products and gaining returns by removing the provision of Paragraph (A) of Article (77) of the Capital Market Institutions Regulations and adding a new provision to the same Article as Subparagraph (2).

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